Medco Health Solutions of Columbus North Ltd

Express Scripts Holding knows that its customers like their medicine delivered quickly. The company administers the prescription drug benefits of millions of health plan members in the US and Canada. Members have access to a network of about 67,000 retail pharmacies, as well as the company's own mail-order pharmacies. On behalf of its insurer clients, Express Scripts processes claims for prescriptions, designs drug benefit plans, and offers such services as specialty drug delivery, disease management programs, and consumer drug data analysis. The firm merged with rival PBM Medco Health Solutions in 2012, creating the largest pharmacy benefits management (PBM) company in North America.

Mergers and Acquisitions

Following the merger transaction, through which Express Scripts acquired Medco for some $29 billion, the two companies were combined under a new holding company structure based at Express Script's existing headquarters in St. Louis. The combined organization, named Express Scripts Holding, lays claim to a one-third share of the US PBM market. Though the deal faced some opposition over competitive concerns, Express Scripts and Medco believe that their merger will ultimately help lower prescription drug costs by boosting consumer advocacy programs and increasing operational efficiencies through a broader network and service offering. Post-merger integration efforts aim to enhance efficiencies in areas including supply chain management, mail-order services, specialty pharmaceutical distribution, and fraud and abuse control.

Geographic Reach

Express Scripts has 132 owned or leased PBM facilities throughout the US and 4 owned or leased PBM facilities throughout Canada.

Operations

The company and the industry have grown rapidly, as the PBMs strive to save money for their customers by negotiating good deals for prescription drugs with networks of retail pharmacies, as well as by encouraging the use of cheaper generic drugs and home-delivered medications. Express Scripts also works to save clients' money by offering disease and medication management programs to help members avoid unnecessary medical expenses.

Sales and Marketing

The company's clients include HMOs and other health insurers, self-insured businesses, and union benefit plans throughout North America. In 2012 Express Script's top three clients were WellPoint (13% of total revenues), the Department of Defense (11%), and UnitedHealth Group (9%).

Financial Performance

The company’s revenues jumped by 103% in 2012 thanks to higher network and home delivery and specialty revenues as the result of Medco acquisition and inflation on branded drugs. The increase was partially offset by a higher fill rate of lower priced generic drugs.

Express Script's net income grew by 3% in 2012 as higher revenues were largely offset by an increase in the cost of PBM revenues related to the Medco acquisition, and higher selling, general and administrative costs, as well as an increased provision for income taxes.

Strategy

The PBM industry has undergone rapid consolidation, a factor that has allowed Express Scripts to grow its sales and profits exponentially in recent years. Express Scripts had historically expanded its PBM operations through smaller purchases. It has also grown through organic measures, such as the addition of new customer contracts, as well as the extension of existing contracts to add new services. In addition, Express Scripts occasionally establishes new operating centers.

Another element of Express Scripts' PBM business that is experiencing higher consumer demand is specialty pharmacy subsidiary CuraScript. Through its primary operating unit, CuraScript Specialty Pharmacy (or CuraScript SP), the subsidiary provides home distribution of specialty prescriptions (primarily injectable biotech drugs that require special packaging and handling); the unit also delivers to doctors' offices and other health care providers. 

While its PBM operations accounted for the lion's share of Express Script's revenues in recent years, the company had also been looking to expand into new high-growth fields of managed care through its emerging markets segment. It added such services as group purchasing for doctors and clinics (through CuraScript Specialty Distribution, or CuraScript SD) and third-party administration of consumer-driven health plans (ConnectYourCare). However, as the company refocused on its North American businesses it closed down it emerging market operations. It moved its FreedomFP fertility drug distribution unit over to the PBM segment in 2011, and in 2012 it sold its ConnectYourCare and other non-core international businesses in the wake of the Medco acquisition.

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Medco Health Solutions of Columbus North Ltd


5151 Blazer Pkwy Ste B
Dublin, OH 43017-9307
Phone: 1 (614) 299-5539
Fax: 1 (614) 4218142
www.medcohealth.com

STATS


  • Employer Type: Unknown
  • Vice Pres-general Manager: William Kelley

Major Office Locations

  • Dublin, OH

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SALARY FINDER

SALARY FINDER

Health Service Administrator

  • $0
  • 25
  • 50
  • 75
  • 100
  • 100+
Yearly Salary Range (US$ Thousands)